Texas law requires that all businesses and organizations review their records annually to determine if they hold any unclaimed property and file a report with the Texas Comptroller. To ensure your business or organization is in compliance with the law, it is key to understand what unclaimed property is, when the deadlines are for filing the report, and how to file the report, and what you need to do if your business is non-compliant with the law.
What is considered to be unclaimed property?
Unclaimed property is any financial asset or tangible property that has been abandoned by the owner. Property is considered to be abandoned when there has been no contact between the holder and the owner for periods ranging from one to fifteen years. The type of property dictates the period of time that the property must be held before being considered abandoned by the owner and submitted to the Comptroller. A few of the most common forms of unclaimed property that your business might be holding, and their abandonment period, are outlined in the table below.
When are the deadlines for reporting unclaimed property and how do I file a report?
The annual report filed with the Comptroller covers any unclaimed property from the period from March 2 through March 1 of the next year. After March 1 of each year, review your company's or organization's records and identify any property that is considered to be dormant based on the abandonment period and the last known contact with the property's owner. Once you have established that the account is dormant, you may then perform due diligence on the account. If you are holding abandoned property exceeding $250, a written notice must be sent to the owner at their last known address stating that you are holding the property and that if not claimed, the property will be submitted to the Comptroller's office as unclaimed property. This due diligence and any required notices that need to be sent must be done by May 1. For property that has not been claimed after the above procedures, prepare a report in which all available information known about the property's owner is disclosed. After the report is prepared, both the report and the payment of the property must be made using the Comptroller's website. The report and payment are both due by July 1.
What if my Business or Organization is Non-Compliant?
Businesses and organizations that have failed to report unclaimed property can be charged penalties and interest from the date the property should have been remitted until the date it is received by the Comptroller. However, there is good news for those that are non-compliant. The Texas Comptroller has a Voluntary Disclosure Agreement (VDA) which authorizes the Comptroller to waive the penalties and interest on delinquent property if the holder has made a good faith effort to comply with the law. Holders can request a VDA by submitting a written request to the Comptroller.
Summary
In summary, it is crucial that you understand the laws regarding unclaimed property in order to be in compliance with the laws. If you have any questions about the Texas Unclaimed Property reporting process, ADKF is here to help!